Is Bitcoin the new gold rush for China’s wealthy? Bitcoin is making waves, overcoming a tough spot at $36,700 and leaving everyone curious about its next move. Arthur Hayes, aco-founder of BitMEX, has stirred up excitement in his new analysis with a hint at a global financial tango as Chinese capital enters Bitcoin.
Arthur Hayes’ Insight: Chinese Capital’s Impact on Bitcoin’s Journey
Through an intriguing analysis, Hayes is shedding light on the potential influx of capital from China into Bitcoin (BTC). He points out that wealthy individuals and state-owned enterprises (SOEs) from China often use banks in Hong Kong for their international financial transactions. Additionally, with the establishment of regulated crypto exchanges and brokers in Hong Kong, the landscape for digital assets has become more structured in the region.
Why Bitcoin, he explained in his words; “If there is a way to move cash from the mainland to Hong Kong legally, Bitcoin will be one of many risk assets that will be purchased.”
Hayes emphasizes that Bitcoin’s connection with China runs deep, citing the historical involvement of major Bitcoin miners in the country and the dominance of Chinese clients in global spot trading before 2020, especially when BTC/Chinese yuan renminbi pairs were available.
He notes that affluent Chinese individuals are well-versed in Bitcoin’s potential as a store of value and are keenly aware of its evolution and success. Given its attractiveness, if there are legal pathways to transfer funds from mainland China to Hong Kong, Hayes predicts that Bitcoin could be among the assets purchased.
The Ripple Effect on Bitcoin and Gold
Regarding the Chinese government’s efforts to transition the economy from supply-driven to demand-led by increasing the cost of credit, Hayes observes a trend where firms sought credit offshore, resulting in a surge in the US dollar’s value and a global rise in credit costs. He foresees a scenario where the availability of yuan credit might reduce the demand for dollar credit, potentially impacting the value of assets like Bitcoin and gold, making them more valuable in dollar terms.
Interestingly, this potential trend doesn’t require direct Bitcoin purchases by Chinese entities. Instead, it’s driven by a shift in global fiat credit availability, hinting at a possible influx of fiat currency into assets like Bitcoin, known for their stability and value-retention characteristics.
Toward $50,000?
Meanwhile, crypto enthusiasts are excitedly waiting for what’s next, thinking about different possibilities. They’re getting ready to reach $50,000 in anticipation of an exciting journey.
